Apple iPad Mini would storm the tablet market

Trent Nouveau, 9th July 2012

Apple's rumored iPad Mini will likely shake up the tablet market this holiday season - if Cupertino decides to launch a 16-gigabyte iteration at a $300 price point.

According to Piper Jaffray analyst Gene Munster, Apple's iPad Mini would cannibalize 10% of existing (high-end) iPad shipments, while taking away 30% of total Android tablet sales in the December quarter.

"We believe this implies that Apple could sell 4-6 million smaller iPads in the December quarter, assuming a holiday launch," Munster wrote in an industry note obtained by AppleInsider.

"If the launch occurs in (the fourth quarter), we believe the smaller iPad would add about 1% to revenue and (earnings per share) in December."

Munster's analysis comes just days after Sterne Agee's Shawn Wu opined that a smaller, less expensive iPad will threaten the tablet ambitions of Google (Nexus 7), Microsoft (Windows Surface) and Amazon (Kindle Fire).

Indeed, the iPad Mini will probably be priced close to Google's Nexus 7 and Amazon's Kindle Fire, both of which boast a 7-inch screen and weigh in at a very reasonable $199.

"It would be the competitors' worst nightmare. The ball is in Apple's court," Wu opined. "[Remember], this isn't like the old days, when it cost thousands of dollars more to buy an Apple product. Fifty or a hundred bucks wouldn't be enough to make someone switch."

Although Apple has yet to officially confirm the existence of an iPad Mini, analysts at Pacific Crest said they anticipated an entry-level 7.85-inch iPad with 8GB of NAND capacity priced at $299.

"We estimate Apple will sell 10.0 million 7.85-inch iPads in FQ1 (Dec.) and 35.2 million in all of F2013," the analysts wrote in a recent industry note.

"Based on estimated component order volume, we believe our iPad mini unit estimates are well within Apple's production capacity. We anticipate 25% cannibalization of the larger 9.7-inch iPad (for every four 7.85-inch iPads added, we reduced our 9.7-inch iPad estimate by one), so our total F2013 iPad estimate increases to 91.6 million from 65.2 million."